Paolo Di Canio gestures towards Lazio fans at the end of their January 2005 match against Roma in the latter's Olympic stadium. Photograph: Paolo Cocco/AFP/Getty Images

The Italian football manager Paolo Di Canio, who once described himself as a fascist, has attempted to quell a growing row over his appointment to coach Sunderland by insisting that he is not a racist and that some of his best friends are black.

Following a wave of concern from fans, anti-racism campaigners and even Sunderland city council at the 44-year old's previous political statements and record of raising straight arm salutes, Di Canio rubbished suggestions he is racist as "absolutely stupid and ridiculous".

In 2005, the Italian twice gave straight-arm salutes to fans of Lazio, the Rome club where he was playing, and reportedly declared afterwards: "I am a fascist, not a racist."

He has "Dux", the Latin for Il Duce, the name by which the Italian dictator Benito Mussolini was known, tattooed on his right biceps and he wrote in his autobiography that he was fascinated by Mussolini whom he described as "a very principled individual".

In a statement issued by the club "regarding the inaccurate portrayal of his beliefs and values from some quarters" Di Canio said: "When I was in England my best friends were Trevor Sinclair and Chris Powell, the Charlton manager [both black former players] – they can tell you everything about my character. I don't want to talk about politics because it's not my area. We are not in the Houses of Parliament, we are in a football club."

Di Canio's appointment comes as Sunderland faces relegation from the Premier League unless it can turn around its form in the last seven games of the season.

Fans were split over whether the new manager's politics matter if he can retain the club's top flight status. Messages on Sunderland's Facebook page on Monday included: "SAFC - The club that says yes to fascism" and "Who's going to be his assistant? Nick Griffin!" Others said the club's success should take priority over politics.

On Monday night the Durham Miners' Association said it was writing to Sunderland to demand the return of the Wearmouth miners' banner, which is on permanent display at the Stadium of Light, in protest at the decision to appoint Di Canio.

"Our banner represents the Durham miners' long struggle for the rights of the working class, rights which were annihilated by fascism in Germany, Italy, Spain and Chile," said Dave Hopper, general secretary of the Durham Miners' Association, who worked for 27 years as a miner at Wearmouth Colliery, the site on which the Stadium of Light stands.

We have a sacred obligation to the millions who were wiped out by Hitler, Mussolini and Franco to oppose fascism wherever and in whatever context this evil creed raises its head, particularly at a time when working people are again being forced to pay for capitalism's crisis as they were in Europe in the 1920s and 30s.

""The appointment of Di Canio is a disgrace and a betrayal of all who fought and died in the fight against fascism.

"Everyone must speak out and oppose this outrage and call on Ellis Short and the Sunderland Board to reverse their decision."

Byrne said of Di Canio: "[He is] an honest man, a man of principle and a driven, determined and passionate individual. To accuse him now, as some have done, of being a racist or having fascist sympathies, is insulting not only to him but to the integrity of this football club."

Sunderland council leader Paul Watson said: "We hope there is a commitment from the club that this won't conflict with the anti-fascist work we are supporting." He said the council would debate the implications of Di Canio's appointment if it is not satisfied with the club's response to concern about the Italian's past affliations with fascism.

"There has been a massive reaction from fans," said Martyn McFadden, editor of A Love Supreme, a leading Sunderland fanzine. "Some are saying why bring politics into it, but others, including people whose parents and grandparents fought and died in the second world war disagree strongly with that.

"It has been an unbelievable few days for many. On Saturday there were African drummers on the pitch at half time and the whole match presentation was themed around the club's new association with the Nelson Mandela Foundation and the next day they employ a manager who has described himself as a fascist."

In 2011, when Di Canio was appointed as manager of Swindon Town, the GMB union withdrew its sponsorship of the club, saying: "We could not be seen to have a financial relationship with a club that has fascist manager."

Jeremy Wray, the former chairman of Swindon Town who hired Di Canio, said on Monday that the coach's politics were irrelevant and described Miliband's resignation as "a sad knee-jerk response".

Football's leading anti-racism organisations were split on the appointment. Lord Ouseley, chairman of Kick It Out, the anti-racism in football campaign, said it has no problem with Di Canio. "In a world of free speech and free expression he's allowed to have political views and to say things," he said. "As long as they're not offending and abusing other people, clearly there's no basis for us to challenge him."

But Piara Power, director of Football Against Racism in Europe, warned the appointment could encourage the far-right. "There is no question to have a manager who calls himself a fascist at at Premier League club will encourage those movements," he said. "I think there is no place in a sport which seeks to draw out positive impacts on social relations and community to have someone who says 'I am a fascist and I admire Mussolini'."

Nazisalutes and lizard takeovers

• In 1938 the entire England football team lined up for a match against Germany in Berlin and raised a Nazi salute in a sporting manifestation of Neville Chamberlain's policy of appeasement.

• Four years earlier in Italy, Mussolini had seized on the staging of the 1934 World Cup to cement his power, reportedly selecting the referees to give Italy the best chance of victory, which they went on to secure.

• Buster Mottram, Britain's top tennis player in the mid-1970s, expressed support for the National Front and once said: "I hope Enoch Powell will never die", before launching a failed attempt to become a Conservative politician.

• In 1990 Mike Gatting, the captain of the England cricket team, led the last rebel tour to apartheid-era South Africa in 1990, hitting the headlines when he reportedly described a protest by anti-apartheid activists outside the team hotel as "a few people singing and dancing".

• Not all sportsmen drift to the right politically. The former Coventry goalkeeper David Icke served as a Green party spokesman until he realised a higher calling: to expose the reptilian bloodline that rules the world.

• This article was amended on 2 April 2013 to change the phrase "former black players" to "black former players".